Must-read before buying stocks: One share vs. one lot, how many times is the trading threshold different between US stocks and Taiwan stocks?

Many novice investors often ask: Why are US stocks so cheap to buy, while Taiwanese stocks are so expensive that I can’t afford them? Actually, the root of this confusion lies in the fact that the trading units used in the two markets are completely different.

Taiwan Stock Market uses “Shares,” US Stock Market uses “Shares” — How big is this difference?

First, clarify the basic concept: How many shares are in one “lot” of US stocks? This question actually reflects the core difference between the two markets.

• US stocks: The minimum trading unit is “1 share,” calculated directly in shares
• Taiwan stocks: The minimum trading unit is “1 lot,” and 1 lot equals 1000 shares

In other words, when you buy one lot of stocks in Taiwan, you are actually purchasing 1000 shares at once. What is the result of this? The trading threshold in Taiwan is much higher than in the US.

How much does this difference amount to? Let’s use numbers to explain

Take a real-world example — TSMC (Taiwan Semiconductor Manufacturing Company), listed in both markets:

• Taiwan Stock (2330): Share price NT$561

  • Buying one lot = 561 × 1000 = NT$561,000 (about 560,000 NT$)

• US Stock (TSM): Share price US$95

  • Buying one share = 95 × 1 = US$95 (about NT$3,000)

The same company, TSMC, has a US stock entry cost that is only about one percent of the Taiwan stock entry cost. This is why, for Taiwanese retail investors, the concept of “one lot” in US stocks—which essentially has no “lot” concept, with 1 share being the minimum unit—is so important.

How to interpret stock prices? How much is one share worth? It’s determined by the market

The stock price is the current trading price of the stock, which is “how much does one share cost”. It is not fixed but fluctuates in real-time based on the matching of buy and sell orders.

For example, Tesla (TSLA) was priced at US$101.81 per share in January 2023, and by August, it had risen to US$254.11. The same stock doubled in price in less than seven months.

The key point is: The face value of a stock and its market price are not directly related. The face value only records the company’s original capital allocation, while the stock price is entirely determined by the company’s profitability and investor expectations. As long as investors are optimistic, the stock price will keep rising.

Why did the Taiwan stock market introduce “odd-lot” trading?

Because the threshold of NT$560,000 for one lot is too high for ordinary retail investors to afford. Therefore, the Taiwan market launched “odd-lot” trading — allowing the purchase of 1 to 999 shares without needing to buy a full lot of 1000 shares.

However, this flexibility comes with a cost:

Odd-lot trading has lower liquidity and longer waiting times for transactions—that’s the trade-off.

Other key differences between US stocks and Taiwan stocks

The question of how many shares make up one lot in US stocks actually reflects the fundamental difference in trading systems. US stocks are measured in “shares” without the “lot” restriction, greatly lowering the participation barrier for retail investors. Taiwan’s “lot” system, while convenient for institutional investors, creates a high threshold for small-scale investors.

What factors drive stock price changes?

After understanding the trading units, you also need to know why stock prices fluctuate:

1. Company fundamentals — Companies with good financial reports and high profits attract buying, pushing the stock price up.

2. Macroeconomics — Factors like GDP, interest rates, and inflation influence the overall market.

3. Market sentiment — News, political events, pandemics, and other unexpected factors trigger panic or optimism.

These three factors constantly influence the numbers you see as stock prices. So, when you look at a stock’s price, that figure is an immediate reflection of these factors.